If an analysis shows an unfavorable materials price variance of $22,000,the journal entry to record the purchase of direct materials and the related price variance would include:
A)a debit to Accounts Payable for $22,000.
B)a debit for $22,000 to Materials Price Variance.
C)a credit for $22,000 to Materials Price Variance.
D)a credit to Work in Process Inventory for $22,000.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

The journal entry to record the purchase of direct materials and the related price variance would include a debit to the Materials Inventory account for the actual cost of the materials purchased and a debit to the Materials Price Variance account for the unfavorable variance. Therefore, the correct choice is option B, which suggests a debit for $22,000 to Materials Price Variance. None of the other options would correctly record the materials price variance.

If an Analysis Shows an Unfavorable Materials Price Variance of $22,000,the